Relationship of financial literacy on individual savings of employees of postal corporation of Kenya based in Nairobi
With the current evolutions in financial markets, it has now become ever more necessary for consumers to be more knowledgeable and proficient in managing their finances. This can be realized through addressing their financial literacy levels. The objectives of the study, was to examine the relationship between financial literacy and individual savings of Postal Corporation of Kenya employees. The study used primary data collected from semi-structured questionnaires. Quantitative data was analyzed using descriptive statistics while qualitative data was analyzed using content analysis. Statistical Packages for Social Scientists (SPSS Version 17.0) was used. The study also used multiple regression analysis to establish the relationship between financial literacy and individual savings. The study findings concluded that financial literacy impacts to a great extent on individual savings. Other factors in the study that were found to contribute significantly to individual savings were education, income, risk tolerance and saving regularity. Gender and age were found to have insignificant effect on individual savings. From the research findings, the study has determined that financial literacy to be a very key variable in increasing the individual savings. It is recommended that the government should devise policies that address financial literacy training programs on individual savings for employees. The study recommends having the number and variety of financial literacy training programs and program providers appointed who will offer comprehensive training on individual savings such as Sacco and bank savings, insurance plans, pension plan and general personal finance. The study further recommends that employers should ensure that their employees are exposed to financial literacy training as per government set policies and that they should come up with strategies that ensure proper imparting of financial education and adherence of employees to savings regularity which has been found to have a positive relationship with individual savings. It is recommended that a study be carried out on other factors that affect individual savings, specifically, a study on relationship between behavioral factors and individual savings from across the country should be carried out in order to pick out other variables not covered in this study. The research should also be done in other organizations and the results compared so as to ascertain whether there is consistency on effect of financial literacy on individual savings among respondents in the various organizations. Since this study concentrated on employed people, further study should be done on self employed population, in order to find out whether the same result can be replicated with self employed population.